Is a heat pump cheaper than gas in Colorado?
West · Cold (e.g. Northeast, upper Midwest) · EIA residential fuel prices
For a reference 2,000 sq ft home in Colorado (assumed seasonal COP 2.4, 95% gas furnace), a heat pump costs about $1,145/year to run versus about $661/year for natural gas — so a heat pump is about $483/yr more than a gas furnace. It is cheaper than propane ($1,507/yr), cheaper than heating oil ($2,136/yr), and far cheaper than electric resistance ($2,747/yr). The cheapest option here is natural gas furnace (95% afue). These are estimates — verify with an HVAC pro.
Source: EIA Electric Power Monthly, Table 5.6.A (residential). Data as of June 2026.
Colorado residential fuel prices
| Fuel | Residential price | Source / period |
|---|---|---|
| Electricity (residential) | 16.74¢/kWh | EIA, March 2026 |
| Natural gas (residential) | $1.122/therm | EIA, March 2026 |
| Heating oil (residential) | $4.491/gal | EIA, Rocky Mountain (PADD 4) |
| Propane (residential) | $2.266/gal | EIA, Rocky Mountain (PADD 4) |
Source: EIA (electricity, natural gas, heating oil & propane). Data as of June 2026.
Colorado residential natural gas is $11.64/Mcf (about $1.122/therm), EIA March 2026. Heating oil and propane are EIA residential prices for Rocky Mountain (PADD 4) (Week ending 2026-03-30) — EIA does not publish these per individual state.
Annual heating cost in Colorado — every system compared
Reference: a 2,000 sq ft home in a cold (e.g. northeast, upper midwest), roughly 56 MMBTU/year of useful heat. Energy cost only (no equipment, install or maintenance):
| Heating system | Annual energy cost | Annual use |
|---|---|---|
| Natural gas furnace (95% AFUE) | $661/yr | 589 therms |
| Heat pump | $1,145/yr | 6,839 kWh |
| Propane furnace (92% AFUE) | $1,507/yr | 665 gal |
| Heating oil (85% AFUE) | $2,136/yr | 476 gal |
| Electric resistance (baseboard, COP 1.0) | $2,747/yr | 16,413 kWh |
Source: EIA fuel prices + ENERGY STAR energy conversions. Data as of June 2026.
Cheapest to run in this reference case: Natural gas furnace (95% AFUE). Run your own home size, COP and prices.
Heat pump vs each fuel in Colorado
| Comparison | Heat pump | Other system | Heat-pump result |
|---|---|---|---|
| vs natural gas (95% AFUE) | $1,145 | $661 | $483/yr more |
| vs propane (92% AFUE) | $1,145 | $1,507 | Saves $363/yr |
| vs heating oil (85% AFUE) | $1,145 | $2,136 | Saves $992/yr |
| vs electric resistance (COP 1.0) | $1,145 | $2,747 | Saves $1,603/yr |
How Colorado compares with similar states
The five states with the closest electricity price to Colorado, and how heat-pump-vs-gas savings look there:
| State | Electricity ¢/kWh | Heat-pump vs gas (ref. home) |
|---|---|---|
| Colorado (this state) | 16.74¢ | $483/yr more |
| South Carolina | 16.45¢ | Saves $23/yr |
| Virginia | 17.05¢ | Saves $43/yr |
| Texas | 16.39¢ | Saves $159/yr |
| West Virginia | 16.37¢ | $4/yr more |
| Alabama | 17.15¢ | Saves $38/yr |
Frequently asked questions
Is a heat pump cheaper to run than gas in Colorado?
Not in this reference case. For a 2,000 sq ft home in Colorado (assumed seasonal COP 2.4, 95% gas furnace), a heat pump costs about $1,145/year vs about $661/year for gas, because Colorado has relatively cheap natural gas. A heat pump is still typically cheaper than propane, oil and electric resistance here.
What does it cost to heat a home in Colorado?
Using EIA March 2026 prices and a 2,000 sq ft home in a cold (e.g. northeast, upper midwest) (about 56 MMBTU/yr), estimated annual energy cost is about: heat pump $1,145, natural gas $661, propane $1,507, heating oil $2,136, electric resistance $2,747. The cheapest here is natural gas furnace (95% afue).
Is a heat pump cheaper than propane or heating oil in Colorado?
In this reference case, vs propane a heat pump saves about $363/year, and vs heating oil it saves about $992/year. Heat pumps usually beat both delivered fuels comfortably because they deliver far more heat per unit of energy.
How does Colorado rank for heat-pump savings?
On heat-pump savings vs a gas furnace (reference 2,000 sq ft home), Colorado ranks #35 of 51 states (1 = saves the most). This reflects Colorado's mix of 16.74¢/kWh electricity and $1.122/therm gas.
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Sources & accuracy
Electricity: EIA Electric Power Monthly, Table 5.6.A (residential) (March 2026); natural gas: EIA residential price (March 2026); heating oil & propane: EIA Heating Oil and Propane Update (Rocky Mountain (PADD 4), Week ending 2026-03-30); energy constants: ENERGY STAR Thermal Energy Conversions. All U.S. public domain. These are statewide/regional averages and the comparison is an estimate, not a quote or engineering analysis. Actual savings depend on your home, climate, equipment and rates. Verify with an HVAC professional. See methodology and disclaimer.
Last updated: 2026-06-29